Amazon’s Marketplace and Third-Party Selling: What Every Entrepreneur Should Know

When you’re ready to begin selling your product on the vast sea that is the internet, there are a lot of options to consider. “Do I sell it myself?” “Do I sell it on Amazon?” “Do I sell it somewhere else?”

It’s a riddle that’s not easy to solve. Each tactic has strengths, and each has drawbacks. The key is knowing what your business needs, and finding something that will meet those needs. Do you need full control over your brand in marketing? Do you want an established infrastructure and a wide customer base? Are you looking for a niche market with loyal customers? Identifying your needs is the first step, and we’re here to help with that.

Below is some advice that should be helpful for every brave new startup, and every daring entrepreneur.

Selling It Yourself

For those looking to really make a brand for themselves, selling products on their own site is probably a natural instinct, and with good reason. Selling it yourself gives you the ultimate control over the products, the marketing, and the fulfillment. Returns happen on your terms, and when there’s a problem, customer support always happens through you. What’s more, you’re not competing directly with other sellers: customers that come to your site and view your products are viewing only your products.

The downsides to doing it yourself are mostly due to the effort and investment required to get things started. You’re building from the ground up, and that’s not easy. With no previous website or infrastructure, no online marketplace and few customers to start with, you have a lot of work ahead of you. And doing it on your own means doing your own web design, your own marketing and your own fulfillment.

In short, selling it yourself is a great idea for businesses with plans to grow and build a brand. For small-timers not looking to build a corporation, it may be best to go another route.

Selling on Amazon

Selling on Amazon’s Marketplace has an obvious advantage: you can cast a very wide net. With the “everything store” claiming the lion’s share of the market, it’s tempting to try to get a slice of that pie. Selling with Amazon provides the opportunity to do just that: using their platform grants access to their wide customer base, their efficient marketing engine, and their established platform. You can even use Fulfillment By Amazon and have them handle all the inventory and delivery for you. In other words, it’s never been easier to springboard off of someone else’s success.

That said, working with Amazon can be bittersweet for some. First off, unless your product is unique, you’ll be dealing with a lot of competition. There’s a lot of boats on the water hoping to catch some fish, so to speak, and there’s only so many fish to go around. You’re also at Amazon’s mercy, and they often make deals with name brands prohibiting the sale of their items by anyone other than themselves. Likewise, poor customer reviews (including falsified ones) can leave a black mark on your record, and may even prompt them to ban you as a seller.

What’s more, Amazon itself competes with the independent sellers, and since they’re the ones controlling the marketplace, they tend to win. They can out-market, underprice and outsell just about any of their partners. Add to that the fact that Amazon can hold you responsible for frivolous customer returns, and that negative reviews (even those obtained by paying the reviewer) can result in being banned from selling, and you have a little bit of a fickle experience.

Bottom line: selling with Amazon will be most beneficial if you’re a smaller outfit that sells unique items.

Selling on a Third-Party Site

Third-party, here, refers to other ecommerce marketplaces with smaller, sometimes more narrow customer bases. These include Etsy, eBay, Newegg, Wal-Mart, Jet, ASOS and beyond. These offer some of the benefits of selling through an established site, without some of the drawbacks of selling through a behemoth like Amazon. Selling with a third party sidesteps some of the startup costs— building your own site and online storefront, maintaining that site, building a customer base and so forth.

It also affords you other benefits that Amazon doesn’t, such as a loyal customer base, greater control over your brand, and control over product fulfillment (which increases control of product quality).

You do, however, still have to deal with some of the drawbacks. First of all, while it’s better than having to build your own market, these marketplaces don’t have the same numbers as Amazon. Also, like Amazon, you have to pay to sell with them. That said, for many startups, small businesses and entrepreneurs, selling third-party can provide the best of both worlds.

In other words, if you’re looking for greater control for a specialized product you intend to sell in a unique market, third-party may be the way to go.

Conclusion

The decision of where to sell online isn’t easy, and it merits some research on the matter. Don’t leave it up to chance; do your part to figure out what matches best with your company’s needs and practices.

And keep in mind, you may be using more than one approach to reach your goals. You may decide to sell on multiple third-party sites. You might even decide to sell on Amazon, too. Maybe you’ll sell on your own website, as well as somewhere else. Or perhaps you’ll sell with Amazon or some third-parties in order to begin building a brand and a customer base, then create your own online marketplace once you’ve got some capital.

Whatever the case, be smart about your decision, and don’t be afraid to cut ties with a marketplace if it isn’t working out the way you wanted. There’s no need to continue a partnership that isn’t benefiting you.

About the Author

Danielle Adams is a freelance writer who's committed to help build bridges between businesses and their customers. In her spare time, she enjoys learning more about Doba — an ecommerce platform that's rapidly growing, reading up on industry books/articles and exploring her local coffee shop.